Markets Overview: (Source: Bloomberg, FT, Reuters, DJ Newswires)

UK 100 Index called to open +30pts at 6395, after a volatile session yesterday with two tests of 6330 and one of 6450, which could yet result in a double bottom reversal if 6450 can be exceeded, however the downtrend since year-end suggests further declines towards Oct/Dec/2014 lows around 6100 could just as easily materialise. Watch levels: Bullish 6450, Bearish 6320

The positive opening call stems from resilient performance by Asian bourses despite the Oil price continuing to leak (US light $47, Brent $50) after the UAE oil minister sad oversupply could last months/years and US oil stocks are seen rising. Help delivered via better than expected German Retail Sales figures this morning and improved Chinese Consumer Sentiment even if worries persist about the Greek election result and its future within the Euro.

US bourses closed comfortably in the red again (S&P down for fifth straight day, longest run in 13 months) and the Volatility index hit a 2yr high on the back of further equities losses fuelled by weak US macro data with PMI Services, ISM Non-Manufacturing and Factory orders all missing consensus expectations adding to doubts about US/Global recovery. A strong USD also weighed on commodities (oil) and related corporates.

Asia-Pacific equities are mixed after two days of losses, with Japan flat as the benefit of a strong USD/weak JPY is offset by worries over the declining oil price and Greek politics. Hong Kong positive thanks to an improvement in Chinese consumer sentiment from near 3yr lows, but Australia hindered by commodity price weakness outweighing improved service sector data (slower contraction) and Chinese consumer sentiment.

Overnight data included an improvement in UK BRC Shop Price deflation, a rise in Chinese Consumer sentiment and better than expected German Retail Sales data for November coupled with upward revisions for October which may help counter some of the region’s doomsayers even if ECB QE is almost nailed on in order to fight a recessionary/deflationary risks.

In focus this morning we have German and Eurozone Unemployment seen largely unchanged, although Eurozone Consumer Price Inflation Estimate for November is forecast to come in negative adding to pressure on ECB to act, even if the Core figure is stable as it remains well below target.

In the afternoon, we look to the US ADP Employment Change for clues as to the health of the US jobs market and what we might be likely to see in terms of Non-Farms payrolls on Friday, the former seen improving but the latter likely having to normalise from a stellar November reading.

With Oil so topical given the standoff between US and OPEC/rest-of-world in terms of production/output and global growth concerns the latest weekly US Crude inventory data will remain of interest to all and sundry, given the negative potential price reaction by the black stuff should US stockpiles have risen as expected.

While Gold is in a 2015 uptrend, it has come off its two-week highs $1220 despite continued weakness in equities and safehaven demand (Greece, global growth worries) as the USD continues continues to strengthen on rate rise expectations and global central bank policy divergence coupled with less petro-dollar selling pressure from the low oil price and flight to safety to the world’s reserve currency.

Further selling and supply glut pressure has seen US Light Crude fall to $47/barrel and Brent testing $50 as the bears maintain their grip on the price of the black stuff. US inventories seen rising this afternoon, adding pressure the argument that the US is becoming more self-sufficient and OPEC losing pricing power.

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Key Overnight Macro Data: (Source: Reuters/DJ Newswires)

• UK                          BRC Shop Price Index                     Deflation slowed
• China                     Consumer Sentiment                     Improved
• Germany             Retail Sales                                         Better

See Live Macro Calendar for full data line-up, incl. consensus expectations

UK Company Headlines: (Source: Reuters/DJ Newswires)

• easyJet passenger numbers up 3.2 pct in December
• Sainsbury's posts better than expected Christmas quarter
• Galliford Try reaffirms profit expectations, sees higher housing revenue
• UK housebuilder Persimmon reports 23 pct rise in full – year revenue
• Boohoo.com lowers profit outlook as discounts hit demand
• Aggreko sees small boost to trading profit after Argentina deal
• Costain says order book at 3.5 bln stg at year-end